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The internal combustion engine market is estimated to increase by USD 27.2 billion, growing at a CAGR of 8.32% between 2022 and 2027. The growth of the market depends on several factors, such as growing demand to improve vehicle performance, increasing vehicle population, and high growth volume for the premium vehicle segment.
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The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing demand to improve vehicle performance is the key factor driving the global market growth. Flat automotive engines still have applications in industries such as aerospace, in addition to the internal combustion engine (ICE) market. The advantages inherent in the boxer engine design are driving the growth of the market. A key design feature of the boxer engine is its low center of gravity (COG) due to its horizontal placement within the vehicle or motorcycle compared to other traditional engine designs such as in-line or V-shaped.
Additionally, the low profile of the flat engine brings the engine orientation closer to the vehicle's powertrain orientation, resulting in smoother and better gearing. In addition, this engine design contributes to the superior performance of the vehicle while producing less unburned fuel for better fuel economy. Therefore, from an OEM perspective, such factors are expected to drive the growth of the market during the forecast period.
The growing development in engine technologies will fuel the global market growth. The demand for improved fuel efficiency and performance in the automotive industry has led to the constant development of new internal combustion engines with more demanding performance. Some of these engines are hybrid engines and VDE. Hybrid engines are more common than VDE in the automotive industry. However, VDE is expected to grow in popularity during the forecast period as hybrid engines are fuel efficient only in heavy traffic and do not affect highway fuel economy. Additionally, hybrid engines are more expensive and less reliable due to the addition of various electrical components to the powertrain.
Companies are pursuing inorganic growth strategies that are expected to lead to the development of engine technology. A key concept in the development of VDE is that the vehicle requires less power at constant speed than at high speed. Based on this, the VDE deactivates half of the engine's cylinders at low loads and reactivates them when more power is needed. VDE has been on the market since 2004. Hence, it is expected to boost the demand for internal combustion engines and is expected to drive the growth of the internal combustion engine (ICE) market during the forecast period.
The imposition of stringent emission and fuel economy standards can majorly impede the growth of the market. Rising amounts of greenhouse gases around the world and declining supplies of conventional fuels are forcing national legislatures to introduce emissions and fuel consumption standards. Vehicle emissions contribute to environmental air pollution. According to a study conducted at the Massachusetts Institute of Technology, harmful vehicle emissions cause approximately 53,000 premature deaths in the United States each year. According to the US EPA, vehicles are responsible for 56% of the country's carbon monoxide emissions. Governments around the world have strict regulations governing fuel emissions and consumption, and OEMs must comply with these requirements.
OEMs have attempted to build improved and more efficient engine management systems to meet these standards. EMS monitors the proper functioning of the engine by controlling fuel injection to ensure proper combustion. This reduces fuel consumption and reduces emissions. Leading OEMs are involved in the research and development of advanced engine management systems, allowing vehicles to operate with minimal fuel consumption and emissions. Consumers now tend to buy environmentally friendly vehicles that consume less fuel. Such factors are expected to hinder the growth of the market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
AB Volvo: The company offers XC 60 twin-engine internal combustion engine which produces quick torque for acceleration pick-up. It also manufactures, develops, and sells trucks.
Caterpillar Inc: The company offers C0.5 industrial diesel engines which are used for different types of small and off-road applications.
We also have detailed analyses of the market’s competitive landscape and offer information on 18 market companies, including:
The report offers clients a deeper understanding of the market and its players through a combined qualitative and quantitative analysis of the companies. The market growth analysis classifies companies into categories based on their business approach, including pure-play, category-focused, industry-focused, and diversified. companies are specially categorized into dominant, leading, strong, tentative, and weak to understand the dos and don’ts of business which in turn can help a client make the best decision
The automotive segment will contribute a major share of the market, due to increasing demand for vehicles, investments by various automakers, and increasing advancements in engine technology. The automotive segment showed a gradual increase in market share with USD 27.36 billion in 2017 and continued to grow by 2021. The automotive engine segment is expected to witness steady growth during the forecast period as the automotive industry increasingly requires continuous innovation in products and manufacturing processes. Therefore, the automobile engine will continue to play an important role as a component of the vehicle. Industry innovations and advancements are increasing the need for advanced automotive engines, driving the market during the forecast period.
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The automotive industry is experiencing booms in several regions. APAC is the fastest-growing automotive market in terms of production and consumption. Therefore, improvements in existing manufacturing facilities and the rapid addition of manufacturing facilities in APAC will have a positive impact on the market during the forecast period. Moreover, the Indian auto sector is now aiming to increase auto exports by five times from 2016 to 2026. Total vehicle exports from India in 2022 were 5,617,246 units. APAC's high growth rate presents a tremendous opportunity for automotive companies. India and China are expected to remain the major target markets for automotive companies during the forecast period due to the increasing consumption of automobiles by the domestic populations of these countries. Such factors are anticipated to drive the automotive segment growth during the forecast period.
Gasoline engines are more fuel efficient than petrol engines. However, they emit particulate matter and nitrogen oxide compounds (NOx). The uneven growth in gasoline engines is due to irregular sales growth in commercial vehicles and narrowing price differentials between gasoline and oil. Gasoline engine components have to withstand higher pressures than gasoline engines due to their different operating cycles. Because gasoline burns at a very low temperature, it produces more exhaust emissions than gasoline engines. Therefore, the gasoline engine segment is expected to grow moderately over the forecast period. Most modern petrol engines offered by OEMs are turbocharged. Stringent emission standards are forcing OEMs to produce more fuel-efficient vehicles, increasing demand for turbocharged gasoline applications worldwide. For example, new US fuel efficiency standards require that by 2025 vehicles must travel an average of 54.5 miles per gallon. Such criteria are expected to help boost sales of gasoline vehicles significantly during the forecast period.
APAC is estimated to contribute 42% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
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In terms of production volume, China and India hold the largest share of the APAC auto engine market due to the presence of large automobile manufacturing bases. Due to lower component prices and the availability of more stable and advanced systems during the forecast period, low-cost manufacturers are expected to enter the market in the Asia-Pacific region, especially China. Factors such as rising living standards and increasing disposable income have increased the demand for automobiles in the region. This will prompt for increased vehicle production in the region. The above factors will lead to increased demand for automotive engines as well as will boost the growth of the internal combustion engine (ICE) market in the APAC region during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest market trends and analysis and growth opportunities from 2017 to 2027.
The Internal Combustion Engine (ICE) Market remains a cornerstone of the automotive industry, catering to both passenger and commercial vehicles in developed and emerging countries. Despite the rise of Electric Vehicles (EVs) and the increasing emphasis on electric powertrains, ICE vehicles continue to dominate global roads. Factors such as vehicle fuel economy, EV infrastructure availability, and strict laws regarding emissions shape the market landscape.
Efficient technologies, including flex-fuel engine manufacturing and natural gas and hydrogen-based engines, address concerns regarding CO2 emissions and fuel supply security. However, challenges persist, including stringent emission norms and noise pollution associated with ICE vehicles. The market's thermal efficiency and electrification efforts strive to balance environmental concerns with consumer demands and regulatory requirements. As the energy and power industry evolves, the demand for IC engines fluctuates, influenced by factors like crude oil prices, fossil fuel reserves, and petroleum product costs. Regulatory presence and fuel consumption regulations play a crucial role in shaping consumer behavior and car usage patterns, reflecting shifts in consumer disposable income levels and preferences. Despite the growing popularity of EVs, the Internal Combustion Engine Market remains resilient, adapting to evolving industry dynamics and consumer needs.
Internal Combustion Engine Market Scope |
|
Report Coverage |
Details |
Page number |
163 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.32% |
Market growth 2023-2027 |
USD 27.2 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.51 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 42% |
Key countries |
US, China, Japan, South Korea, and Germany |
Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AB Volvo, Caterpillar Inc., Cummins Inc., DEUTZ AU, Hyundai Motor Co., Mahindra and Mahindra Ltd., Mercedes Benz Group AG, Mitsubishi Heavy Industries Ltd., Navistar International Corp., Renault SAS, Robert Bosch GmbH, Rolls Royce Holdings Plc, Shanghai Diesel Engine Co. Ltd., Toyota Industries Corp., Volkswagen AG, Wacker Neuson SE, Wartsila Corp., Yamaha Motor Co. Ltd., Yanmar Holdings Co. Ltd., and Siemens AG |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
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